PRECIOUS-Gold jumps over 1% as Powell strikes dovish tone

(Recasts, adds comment and updates prices)

* Dollar slips to one-month low

* Silver hits highest since July 19

* Gold's rally could be more sustained- analyst

By Nakul Iyer

July 29 (Reuters) - Gold jumped more than 1% on Thursday as investors cheered U.S. Federal Reserve Chairman Jerome Powell's comments that the central bank was unlikely to hike rates anytime soon.

Spot gold rose 1.1% to $1,827.30 per ounce by 9:58 am EDT, having earlier hit its highest since July 16 at $1,827.95.

U.S. gold futures climbed 1.5% to $1,826.70 per ounce.

Powell said the U.S. job market still had "some ground to cover" before it would be time to pull back support.

"You're going to see inflation heat up moving forward because the Fed is more focused on employment and is not going to fight them in the near-term and that is a positive environment for precious metals," said David Meger, director of metals trading at High Ridge Futures.

"This is not a flash-in-the-pan type rally but a more sustainable one because nothing is standing in gold's way."

Reinforcing Powell's views, data showed the U.S. economy grew at a 6.5% annualized rate last quarter, below a forecast for an 8.5% rise by economists in a Reuters poll.

Lower U.S. interest rates reduce the opportunity cost of holding non-yielding bullion.

Adding to gold's support, the dollar index slipped to a one-month low, making gold less expensive for holders of other currencies.

"Rising monetary policy uncertainty, inflation and increasing risk of equity market volatility should favour demand for safe-haven assets," ANZ Research said in a note.

Global demand for gold rose in the second quarter to its highest quarterly level in a year, as central banks and investors stepped up purchases, the World Gold Council said in a quarterly report.

Silver jumped 2.9% to $25.65 per ounce, having earlier hit its highest since July 19.

Elsewhere, platinum rose 0.1% to $1,065.49 an ounce, and palladium gained 1.6% to $2,667.03. (Reporting by Nakul Iyer in Bengaluru Editing by Sonya Hepinstall)

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